The Asset Manager provides the following services to us:

• Investment Management
  The Asset Manager formulates and executes our investment strategy based on our basic investment policy with respect to our portfolio composition, geographic diversification and other characteristics of our investment properties.
• Oversight of Property Management
  The Asset Manager directs or supervises our on-site property managers' implementation of various programs, including the maintenance and improvement of our properties, marketing and leasing activities.
• Property Acquisition and Disposition
  The Asset Manager is responsible for identifying acquisition targets, purchasing properties, if necessary, restructuring tenant lease terms and property refurbishments, and disposing of properties.
• Investor Relations and Financial Reporting
  The Asset Manager is responsible for our investor relations, including the disclosure of new developments with respect to our properties and the reporting of our Fund's financial performance. It is also responsible for our regulatory filings.
• Finance and Accounting
  The Asset Manager is responsible for our cash management and other financial affairs, including planning and budgeting functions, management of debt and equity issuances to Fund our acquisitions and investment of tenant leasehold and security deposits.

Property Management
One aspect of our strategy is to increase portfolio value through proactive property management. The Asset Manager carefully selects and actively oversees property managers who are responsible for the day-to-day operation and management of the properties in which we invest. The selection process is competitive, and the Asset Manager meets and receives proposals from several prospective property managers for each property. The Asset Manager chooses property managers for each property taking into account a number of factors including the specific characteristics of the property and the expertise, experience and compensation of the property manager. The Asset Manager in general seeks terms for property management agreements that allow flexibility in our efforts to respond quickly to the property's specific characteristics and tenant needs.

The following table lists the property managers of our properties.

Property Managers

Xymax CUBE Sendai Nakayama Shopping Center ESPA Kawasaki 8953 Osaka Shinsaibashi Building Ito-Yokado Narumi Abiko Shopping Plaza Ito-Yokado Yabashira 8953 Harajuku FACE Building AEONMALL Higashiura AEON Sapporo Naebo Shopping Center Itabashi SATY AEONMALL Yamato 8953 Jiyugaoka Building Jusco City Yagoto Shopping Center Jusco City Nishi-Otsu Omiya SATY AEONMALL Tsurumi Leafa AEONMALL Itami Terrace Oyama Yuen Harvest Walk AEON Yachiyo Midorigaoka Shopping Center Geo Akamatsu Co., Ltd. JUSCO Chigasaki Shopping Center Hakata Riverain Ito-Yokado Kamifukuoka-higashi Ito-Yokado Nishikicho AEON Kashiihama Shopping Center GYRE Tobata SATY Loc City Ogaki Kawaramachi OPA AEON Ueda Shopping Center Ito-Yokado Yotsukaido AEONMALL Co., Ltd. Nara Family Kyoto Family CB Richard Ellis 8953 Minami Aoyama Building SEIYU Hibarigaoka Jusco City Takatsuki Jones Lang LaSalle Ito-Yokado Tsunashima Bic Camera Tachikawa Jusco Naha Shopping Center AEON Sapporo Hassamu Shopping Center Office Mitsuki 8953 Kita Aoyama Building 8953 Jingumae 6 Building G-Bldg. Jingumae01 8953 Daikanyama Building Esquisse Omotesando Annex Nomura Building Management Co., Ltd. Cheers Ginza AIM Create Higashi-Totsuka Aurora City HankyuHanshin Building Management Co., Ltd. 8953 Saitama Urawa Building Pro Cap Ario Otori Qualication, Inc. G-Bldg.Jingumae02

Typically, for each property in our portfolio, the Asset Manager, the trustee of the trust holding the property and the property manager enter into a property management agreement. Our current property management agreements have terms ranging from one to ten years. The term is automatically extended for successive periods unless advance termination notice is provided.

The role of the property manager varies from property to property. For all properties, property managers are responsible principally for management of budgeting, tenants, including leasing management, lease negotiations and handling of claims, and repair and maintenance. In addition, the property managers for our growth-type properties, which include tenants that pay a portion of rent based on their sales, have a greater role, especially in managing cash from tenants' sales, promotions and marketing, and other activities designed to increase customer traffic and the sales of our tenants.

Our fees to property managers vary, but typically have the following components:

• a fixed monthly fee and, for some of our properties, an additional fee linked to the performance of the property;
• a one-time brokerage commission payable for each new tenant for the property, typically equal to one-month's rent to be paid by the new tenant, which is shared between the property manager and the outside real estate agent, if the new tenant is placed through an outside real estate agent;
• a one-time commission payable for a tenant that renews its lease with us under certain circumstances, typically equal to half-a-month's rent to be paid by the tenant; and
• fees associated with the management of construction projects at a property when such projects are undertaken.

The Asset Manager makes all key strategic decisions and retains final authority over all operating matters at each property, based in part upon active oversight and input from the property managers. One of the most important functions of the Asset Manager is to direct and supervise proactively the various programs to be implemented by on-site property managers, including the following:

• Marketing and Promotion
  With respect to the growth-type properties we own or intend to acquire, we expect the property managers to prepare marketing programs and tailor them to our properties. In order to enhance each of our properties' appeal to a broad range of shoppers, the Asset Manager continually monitors the stores in our properties, with close attention given to tenant sales promotions, customer attitudes, community service and media coverage.
• Tenant Satisfaction
  Recognizing that the tenants' satisfaction is the key to efficient management of the properties, the Asset Manager collaborates with the property managers to build long-term relationships with existing and targeted retailers.
• Property Maintenance and Improvement
  The Asset Manager directs the property managers to implement comprehensive maintenance and improvement policies, including those pertaining to periodic renovations and additions of amenities, to help ensure that our properties remain attractive to the lessees.
• Budgeting and Cost Control
  The Asset Manager directs and supervises the property managers in the formulation of budgets for individual properties and is involved in the control and monitoring of operating costs by facilitating the use of purchasing contracts and other cost-savings programs by the property managers.

For ease of calculation and clarity, as well as the avoidance of potentially perceived conflicts, it was decided to assess our asset management fee on the basis of assets under management only; particularly in light of potential concerns with cash flow and other measures which could be perceived as creating conflicts in terms of the calculation of our underlying asset management fees.

We undertook a considerable analysis of global precedents relating to asset management fee levels as well as operative Management Expense Ratios (MERs) in our asset management fee determination process. For ease of calculation and clarity, as well as the avoidance of potentially perceived conflicts, we decided to assess our asset management fee, which is paid quarterly at the rate of 60 basis points per annum based upon, subject to certain adjustments within fiscal periods, total assets only.